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Budget vs price for new boat

Discussion in 'General Yachting Discussion' started by TBAZ, Jul 30, 2013.

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  1. TBAZ, Jul 30, 2013
    #1
    TBAZ

    TBAZ New Member

    Joined:
    Jul 22, 2013
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    Location:
    Phoenix AZ (yes there are lakes in AZ)
    We are looking to purchase a 50ft plus CPMY. We are partial to the late 80s or 90's Californian or an earlier Hatteras for use on the CA coast.

    The use will be for the two of us (maybe occasional guests) cruising the coast and Catalina trips. We are anbticipating occasional live aboard for a few months each year. Not a full time cruiser but not just a dock queen. WE are partial to the older construction and wood appointed interiors from our sailing influuence. With my work I can be in San Diego, Long Beach or LA marinas.

    My question is when considering a purchase if we set $250K cash budget, not the purchase price, what is a realistic purchase price to consider when factoring realistice acquisition and conditioning cost of a new to us older boat. Essentially I am walking backwards from the budget to the price.

    I do realize there are long lists of variables so in getting things started I am setting the following as a financial straw man. I realize that as condition goes up price goes up but I would also think the non-discretionary repair expense would decrease and vice versa. So I do see trade- offs in the various categories.

    So here is my budget based thinking that will eventually determine the boat and price points we will consider.


    Budget - $250,000 minus the following values equals the sale price.

    - $2.5K Survey (assuming one survey)
    - $25K tax (CA use tax or a moving fee if out of state.)
    - $1.5K - Legal review
    - $20K set aside for mechanical and equipment repairs - unknown issues post survey (this will vary greatly but a starting point)
    - $15K for some basic want to have stuff (the cosmetic, make it your own items)
    - $1k slip initiation and startup fees
    - $2.5k travel and time while purchasing
    - $1.5K insurance


    Based on these cost estimates a starting budget of $250K would net out to a $180K to $190K contract price. Is this a realistic budget vs. sales price consideration?

    I do realize this is getting to day one of ownership, not the ongoing maintenance, the want to have toys that will come with time. Not to mention the wife’s "nesting account". That is another whole discussion and budget.

    Thanks for any comments, thought or guidance.

    Tim
  2. RER, Jul 30, 2013
    #2
    RER

    RER Senior Member

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    Location:
    Newport Beach CA
    Your budget is realistic. Like you said, there are variables. Late 80's early 90's Californians remain popular on the brokerage market. They can be had in the mid to high $100's but It may take a sale price in the low $200's to buy a well equipped, well maintained boat. I'm partial to the lower hp (375) CAT over the 425/435 CAT or the DD6V92 boats.

    Re: $2.5K Survey (assuming one survey) $2.5K should be enough to cover vessel survey w/haulout and a separate mechanical inspection of engines and generator.
  3. NYCAP123, Jul 30, 2013
    #3
    NYCAP123

    NYCAP123 Senior Member

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    Location:
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    Your numbers look fairly good except for the "$1k slip initiation and startup fees". Not sure I understand that, but if you're talking about dockage, around here that would be about $5K per season for a 50'. I'd also put about $50K on the side in case you get hit with an engine rebuild. We blew a low hour motor after 13 hours the first season, and someone wrote here recently about blowing a motor on his maden trip back to his home marina. It happens.

    Also, since you're coming from sails, butget for fuel ($4+ per gallon x ____gph.
  4. TBAZ, Jul 30, 2013
    #4
    TBAZ

    TBAZ New Member

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    Location:
    Phoenix AZ (yes there are lakes in AZ)
    Thank you for the responses. I was thinking my numbers might have been a little generous but it seems realistic is a better word.

    We are not pure sail. We are what I call bi-botal. Our roots are sail but for the last 4 years have also kept out 45' Chris Craft with twin gas 330hp in a fresh water lake here is AZ, Not the open waters but some experience and price basis to work from. The seamanship comes from years on the water through racing and cruising under sail and motro when required. The expense from the power side. LOL.

    We feel for the puffers when the wind dies, throw them our wake and motor happily by, but have a different view when at sail of all those loud and dirty smokers. Bi-Botal.

    The slip fees is my ignorance of the marina in CA, In AZ I think we are getting accustomed to the prices associated with a no choice option. A slip to accomodate this boat is easily $1000 a month, 1 year deposit fee and a yearly automatic renewable contract unless you give them you first born, i think. A long way from our mooring ball in Maine. i have not got to the marina selection/details yet so thank you for a heads up that I can gain a few doallrs there.

    Tim
  5. RER, Jul 30, 2013
    #5
    RER

    RER Senior Member

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    Location:
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    Your budget of $1K for slip startup is basically correct. Typically in California you will be required to put up a deposit equal to a month's rent. $1K might cover you, but it could run a little to a lot more depending on the marina's slip rates.
  6. ArielM, Jul 30, 2013
    #6
    ArielM

    ArielM Senior Member

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    Location:
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    I actually think your numbers are generous. First of all i have never heard of a $1k dock initiation fee. The $15k for cosmetics i would say is built into the price of the boat. Based on your numbers your contract price should be for $190k to allow (in part for $15k in cosmetics upgrades etc.) But what if you find a nice boat for $205k? I wouldn't budget another $15k for these upgrades. Upgrades and cosmetic face lifts will have to be factored on a case by case basis.

    $20k for issues brought up during survey also seems high. There is always the unknown but putting a number on this is tough. You should definitely have a reserve in case something goes wrong but banking on $20k going wrong is too conservative for me. (but be aware you could blow both engines a week after closing and i promise it will cost more than $20k.) Mechanical failures are part of owning a boat and i wouldn't factor that in the upfront cost of the boat. Annual maintenance and up keep is where this should be budgeted.

    $25k for taxes assumes you buy the boat for $250k. If your purchase price is only $190k your taxes will only be around $19k.

    I dont think you need $1500 for an attorney either unless you are buying a boat which is in an LLC. Try to use a standard California Yacht broker Association Contract.

    $2,500 for survey is about right for an out of water survey as well as mechanical survey. Make sure whoever you use for the engines specializes in that manufacture.
  7. ScrumpyVixen, Jul 31, 2013
    #7
    ScrumpyVixen

    ScrumpyVixen Member

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    Location:
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    I'd go with realistic, not generous.

    Its a 20 + year old boat.

    The list of items to fix will be long. You can either bite the bullet and get a large proportion done upfront, or do it over time as they break / when you feel the need. Either way, its still costs. Suggest you do what you should upfront, so you lessen the chance of (little but annoying) things going wrong on "every trip". You know the drill - batteries are dead or close to, so it just cranks when you hit the key: the toilet valve sticks closed: etc
  8. TBAZ, Jul 31, 2013
    #8
    TBAZ

    TBAZ New Member

    Joined:
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    Location:
    Phoenix AZ (yes there are lakes in AZ)
    THANKS TO ALL. The comments are helping and driving more research in some areas to learn the CA way of doing things. Too many times I have seen people go big and end up with empty pockets and a slip queen and act suprised when the bills come in.

    On the consmetics stuff I just know what the the admirals "nesting" has cost me in the past. I will never forget the $10K pilow case day....good sales person and a happy wife. I guess she dreads the electronic demo days so we are proably even.

    I know we are in the 20 year old range but in some cases those older boats have their advantages. The fit and finish in many cases seems much stronger than some of the snap together boats of today. You are right though the list grows faster than the fix at times if you wait for tomorrow. It is a challenge to have a new to us boat and see it set in the yard for 6 months. I sure there will have to be a balance.

    it is good to hear that CA has some standard forms to rely on. A LLC has provided it advantages but you are right the set up can get costly to do right.

    Thanks for the tax correction. I hope CA puts it to good use.....

    Things go wrong on a boat????....LOL that is not what the PO said.....


    Thanks all for weighing in....

    Tim